Partisan and incompetent IRS must go

The Internal Revenue Service’s reputation was awful even before May 10, when it was revealed that the IRS had systematically discriminated against conservative groups for years, then hidden this appalling abuse of power from Congress.

IRS problems go far beyond just its ideologically driven assault on fairness. A recent Government Accountability Office report on the IRS depicted a sea of incompetence, with tax refunds sent to dead people, major miscalculations of taxes owed and this astounding shortcoming: “IRS does not have a detailed listing or subsidiary ledger that accurately tracks and accumulates unpaid tax assessments and their status on an ongoing basis.”

It’s 2013. Computers have been ubiquitous for a generation. And the IRS can’t even track what it’s owed.

The incompetence hardly ends there. A recent Treasury Department report concluded that over the last decade, the IRS approved more than $130 billion in refunds that it should have rejected in one niche category alone.

Given this backdrop, we have a not-that-radical proposal: Shut the agency down in tandem with an ambitious reform of the tax code that wipes out its complexity and in so doing makes capricious “enforcement” much less likely and competent administration by a new, much smaller agency more likely.

Yes
79% (181)

No
21% (47)

228 total votes.

A simple flat tax on income earned above $40,000 with a handful of exemptions is one alternative. A streamlined tax code designed to promote economic growth, such as the one touted by former Gov. Arnold Schwarzenegger, is another. But there are many, many alternatives that make more sense than a system so complex and loophole-ridden that it amounts to a full employment act for CPAs and tax lawyers.

There’s also another benefit to shutting down the IRS: It wipes out a self-content, sclerotic bureaucracy that thinks highly of itself, especially at its upper reaches — even as it ignores a long parade of critical independent evaluations.

Consider the appalling case of Sarah Hall Ingram, the IRS official in charge of the agency’s tax exempt division in 2010 when it launched its organized effort to hassle and impede conservative groups. Not only did she get more than $100,000 in bonuses from 2009 to 2012, she recently won a big promotion. Ominously enough, Ingram is in charge of the IRS division that will monitor every taxpayer as part of the Obamacare requirement that everyone have health insurance. She was promoted even though IRS officials have known for a year that she oversaw an outrageous and illegal persecution of Americans because of their politics.

If this is what gets you promoted at the IRS, then maybe we just shouldn’t have an IRS.

Pairing tax reform with the shuttering of the IRS doesn’t have to be a partisan affair. President Obama has called for an overhaul of the tax code. So have legions of economists. Combining a smarter, simpler tax code with the demolition of the IRS could be both a worthy effort and a popular one.